Core Insights - The four major sports brands in Hong Kong—Anta Sports, Li Ning, Xtep International, and 361 Degrees—achieved revenue growth in the first half of 2025, but profit performance varied significantly [1][5] - Increased discounting has become a common strategy in the industry, impacting profit growth and gross margins [1][2] - Trends such as "opening large stores" and professional upgrades are becoming prominent in the industry [1][8] Revenue and Growth - In the first half of 2025, Anta Sports led with revenue of 38.54 billion yuan, a growth rate of 14.26%. Li Ning, Xtep International, and 361 Degrees reported revenues of 14.82 billion yuan, 6.838 billion yuan, and 5.705 billion yuan, with growth rates of 3.29%, 7.14%, and 10.96% respectively [2] - Over the past three years, except for Anta Sports, the other three brands showed a decline in growth rates: Xtep's growth fell from 14.76% to 7.14%, 361 Degrees from 18.00% to 10.96%, and Li Ning from 12.98% to 3.29% [2] - Anta Sports has maintained double-digit revenue growth for four consecutive years, but its main brands, Anta and FILA, have seen growth rates drop to single digits, with over 10% growth driven by outdoor brands like Descente and Kolon [2] Online Sales Performance - Online channels have become a common growth highlight for all four companies, but they have also negatively impacted gross margins. In the first half of 2025, online revenue growth rates were 17.6% for Anta Sports, 7.4% for Li Ning, and 45% for 361 Degrees [2][3] - The online revenue share for Anta Sports, Li Ning, and 361 Degrees was 34.8%, 29%, and 31.8% respectively, indicating that online business has become an important revenue pillar [3] Gross Margin Analysis - Anta Sports' gross margin decreased by 0.7 percentage points to 63.37%, attributed to increased costs in professional categories and higher online discounting [3] - Li Ning's gross margin fell by 0.4 percentage points to 50.04%, due to changes in channel structure and intensified promotional competition [3] - 361 Degrees experienced a unique situation where its gross margin increased by 0.2 percentage points to 41.5%, driven by a "price for volume" strategy that lowered average wholesale prices while increasing sales [3] Net Profit Performance - The net profit performance of the four brands showed divergence, with Anta Sports and 361 Degrees facing slowing net profit growth, while Li Ning experienced a decline. Li Ning's net profit was 1.737 billion yuan, down 10.99% year-on-year [5] - Anta Sports reported a net profit of 7.031 billion yuan, a decrease of 8.9%. However, excluding the impact of Amer Sports' listing in the previous year, net profit grew by 14.5% [5] - 361 Degrees' net profit was 858 million yuan, reflecting a growth of 8.61%, down from 12.23% in the previous year [5] Industry Trends - The industry is witnessing significant trends in market behavior and strategic layout, particularly in the competitive running shoe market, where brands are focusing on original research and development [7] - Brands are increasingly targeting niche markets and launching "precisely segmented" running shoes to meet diverse consumer needs [7] - The trend of "opening large stores" is common among the four brands, with flagship stores often exceeding 1,000 square meters and offering a mix of experience, service, and social interaction [8]